Tag: tepid

Oil prices fell along with weak stock markets on Thursday, but trading was tepid ahead of a meeting by producer group OPEC that is expected to result in a supply cut aimed at draining a glut that has pulled down crude prices by 30 percent since October. International Brent crude oil futures were down 7 cents, or 0.1 percent, at $61.49 per barrel. Traders said oil prices were being weighed down by weak global financial markets, which saw stock markets tumble on Thursday. Led by Saudi Arabia, OPEC

Oil prices fell along with weak stock markets on Thursday, but trading was tepid ahead of a meeting by producer group OPEC that is expected to result in a supply cut aimed at draining a glut that has pulled down crude prices by 30 percent since October.

U.S. West Texas Intermediate (WTI) crude futures were at $52.66 per barrel at 0140 GMT, down 23 cents, or 0.4 percent, from their last close.

International Brent crude oil futures were down 7 cents, or 0.1 percent, at $61.49 per barrel.

Traders said oil prices were being weighed down by weak global financial markets, which saw stock markets tumble on Thursday.

Since early October, crude oil has lost around 30 percent of its value amid surging supply and fears that an economic downturn will erode fuel demand.

The Organisation of the Petroleum Exporting Countries (OPEC) is meeting at its headquarters in Vienna, Austria, on Thursday to decide its production policy.

Led by Saudi Arabia, OPEC’s crude oil production has risen by 4.1 percent since mid-2018, to 33.31 million barrels per day (bpd).

Oil output from the world’s biggest producers – OPEC, Russia and the United States – has increased by a 3.3 million bpd since the end of 2017, to 56.38 million bpd, meeting almost 60 percent of global consumption.

The increase alone is equivalent to the output of major OPEC producer United Arab Emirates.

Russia, a major oil producer but not a member of OPEC, will meet with the producer cartel on Friday to discuss production levels, and it is widely expected that a supply cut will be agreed.

“Markets…believe the production cut deal will be in range of 1-1.3 million bpd,” ANZ bank said on Thursday.

The fact that paychecks have been slow to increase amid the robust economic recovery and record-high corporate profits has left some workers frustrated. Recently, a possible theory has emerged: instead of raising wages, companies are giving out bonuses and adding benefits. Don’t get your hopes up, experts say. “I’m not aware of any evidence that shows that bonuses as a general matter are increasing or that they’re a substitute for wages,” said Seth Harris, a deputy labor secretary under former P

The fact that paychecks have been slow to increase amid the robust economic recovery and record-high corporate profits has left some workers frustrated.

Recently, a possible theory has emerged: instead of raising wages, companies are giving out bonuses and adding benefits.

Don’t get your hopes up, experts say.

“I’m not aware of any evidence that shows that bonuses as a general matter are increasing or that they’re a substitute for wages,” said Seth Harris, a deputy labor secretary under former President Barack Obama.

Today, there are 139 (and they make up 28 percent of the S&P 500). In 2018, only three companies in the S&P have split their stocks. The Dow Jones Industrial Average is a price-weighted index, so higher-priced stocks move the index more than lower-priced stocks. Those that are included in the index may be reluctant to split because it would reduce their influence on the index. The business of stock trading has been declining as fewer shares have been trading.

And It’s not just Amazon, which is approaching $2,000 a share, a level that would have been thought absurd even five years ago.

In 1998, there were only six stocks over $125 in the S&P 500. Today, there are 139 (and they make up 28 percent of the S&P 500).

In 1998, no stocks were over $250; today there are 30.

The first $1,000 stock appeared in 2013. Today, there are four in the S&P 500.

You can attribute this to the relentless rise of the stock market, which is up 50 percent in the last five years, plus the refusal of companies to split their stocks.

The rise of exchange-traded funds and the increasing dominance of institutional investors over mom and pop investors has led companies to rethink things. Howard Silverblatt, who has tracked stock splits for 40 years at Standard & Poor’s, told me that back in the 1990s, if a company had a target range of, say, $60 for its stock, it would wait until it was over $70 and then split the stock. “Stocks used to be priced to individual buyers. No one cares about that anymore.”

Institutional investors, Silverblatt says, are largely indifferent to the price of the stock, since they tend to buy by dollar amount, not stock price.

The result is that stock splits are few and far between. In 1999, nearly 20 percent of the S&P 500 (91 companies) split their stock, an event so common that Standard & Poor’s once had a business that would beep you when a company announced a split.

In 2018, only three companies in the S&P have split their stocks.

The Dow Jones Industrial Average is a price-weighted index, so higher-priced stocks move the index more than lower-priced stocks. The committee that decides what stocks go in the Dow has been reluctant to include especially high-priced stocks because they will dominate the index, but Silverblatt points out that there can be an opposite effect. Those that are included in the index may be reluctant to split because it would reduce their influence on the index.

There’s another impact. The business of stock trading has been declining as fewer shares have been trading. Just look at Amazon. It has average daily volume of 5 million shares. If it had been splitting regularly so it was a $90 stock rather than an $1,800 stock, it would be trading 100 million shares a day to trade the same dollar value.

That’s a huge difference: 100 million versus 5 million. That alone would increase trading volume on the Nasdaq by 6 percent.

The e-commerce company said third-quarter revenue would be between $253 million and $257 million. Shopify helps small- and medium-sized businesses run their online operations, by providing such things as file storage space, printing labels, gift cards and fraud detection services. The company’s revenue also beat estimates, with Shopify bringing in $245 million, a 62 percent jump from a year ago, topping Wall Street’s expected $234.6 million, according to FactSet. When you’re trading at this high

Shopify initially rose after releasing better-than-expected earnings on Tuesday before the market opened. The stock then turned lower later in the morning and ended the day down 6.7 percent as traders reacted to lukewarm guidance, a new offering of stock and a possible slowdown in net merchants added to the platform.

The e-commerce company said third-quarter revenue would be between $253 million and $257 million. Analysts expect revenue of $253.2 million. Shopify helps small- and medium-sized businesses run their online operations, by providing such things as file storage space, printing labels, gift cards and fraud detection services.

Shopify reported second-quarter adjusted earnings of 2 cents per share, a cent better than the same period a year ago and above analysts’ expectations of a loss of 3 cents per share, according to FactSet. The company’s revenue also beat estimates, with Shopify bringing in $245 million, a 62 percent jump from a year ago, topping Wall Street’s expected $234.6 million, according to FactSet. While the top- and bottom-line results were steady, one analyst pointed beyond Shopify’s headline results to a more subtle challenge facing the company.

“The incremental dollars were down year over year, which suggests unless there was a radical shift in pricing, which we don’t think there was, net new merchants added were down year over year,” RBC Markets analyst Ross MacMillan told CNBC.

In a separate filing, Shopify said after the bell Monday it would be offering $5 billion in mixed securities over the next 25 months.

“Long-term thinking is behind the preliminary short form-based shelf perspective we filed yesterday evening,” said a company executive on its conference call Tuesday, according to a FactSet transcript. “Our original shelf expires this quarter. By filing this shelf we retain financial flexibility over the next two years.”

“To be clear, we consider this to be ordinary course of business given the pending expiry of the current shelf and we have no current intention to undertake an offer in,” the executive added.

The shares began their significant move lower during the earnings call Tuesday morning.

If Shopify is not attracting new merchants to its platform, as RBC’s MacMillan suggested, then the company’s forecast for the rest of the year looks even worse.

“When you look at full-year guidance, it was a very, very small raise. When you’re trading at this high of a multiple, you can’t have a small raise,” MacMillan said.

The company also posted a corrected earnings release on Tuesday. Shopify says the corrections were “minor” changes to its wording, as it updated the words “pay” and “payments” in descriptions of the company’s products.

Mexican presidential front-runner Andres Manuel Lopez Obrador has extended his lead well beyond his nearest rivals with just a month to go before the July 1 election, an opinion poll showed on Thursday. The survey by polling firm Parametria showed support for the leftist former mayor of Mexico City at 45 percent, an increase of six percentage points from a prior April poll. That gave Lopez Obrador more backing than his nearest two rivals combined. Lopez Obrador, 64, was runner-up in the previous

Mexican presidential front-runner Andres Manuel Lopez Obrador has extended his lead well beyond his nearest rivals with just a month to go before the July 1 election, an opinion poll showed on Thursday.

The survey by polling firm Parametria showed support for the leftist former mayor of Mexico City at 45 percent, an increase of six percentage points from a prior April poll. That gave Lopez Obrador more backing than his nearest two rivals combined.

Lopez Obrador, 64, was runner-up in the previous two elections, with fears that he could destabilize the economy contributing to his defeat. This time frustration over corruption, rising violence and tepid growth have all helped lift his bid.

Lopez Obrador’s closest competitor is Ricardo Anaya, a former chairman of the center-right National Action Party (PAN), who is fronting a right-left coalition of parties.

The French company is selling its U.S. business, Axa Equitable Holdings, in an initial public offering. The IPO priced at $20 a share, below the expected $24 to $27 per share range. It opened trading at $19.75 on Thursday at the New York Stock Exchange under the ticker symbol EQH. At $2.75 billion in proceeds, the deal is still the largest U.S. IPO of the year, according to Renaissance Capital. But it was far less than the $3.7 billion it had expected to raise at the high end of the pricing rang

Axa’s $15.3 billion takeover of global property casualty firm XL Group was a monster deal in the insurance world, but Paris-based Axa’s plan to pay for the acquisition has come up short.

The French company is selling its U.S. business, Axa Equitable Holdings, in an initial public offering. But the money it raised was about $1 billion less than the goal.

The IPO priced at $20 a share, below the expected $24 to $27 per share range. It opened trading at $19.75 on Thursday at the New York Stock Exchange under the ticker symbol EQH. It closed at $20.34, up 1.7 percent.

At $2.75 billion in proceeds, the deal is still the largest U.S. IPO of the year, according to Renaissance Capital. But it was far less than the $3.7 billion it had expected to raise at the high end of the pricing range.

Insurers have been a beaten-down sector this year. Principal Financial shares are down more than 17 percent, while shares of Prudential Financial and Lincoln National are both down more than 12 percent, and shares of MetLife have fallen 7.7 percent.

Axa Equitable begins trading in that difficult environment and at a time when the parent company Axa was counting on the proceeds from the IPO, two factors that put pressure on the opening price, said Kathleen Smith, principal at Renaissance and manager of IPO ETFs.

“Investors realized the deal needed to get done,” Smith told CNBC on Thursday. “They had the upper hand.”

The moves in pre-market trade come as global markets remain on edge, awaiting an announcement by President Donald Trump on the future of an international nuclear agreement. In spite of the U.S. incumbent’s threats to pull out, President Hassan Rouhani stated that Iran had a plan to counter any move made by Trump when it comes to the deal; Reuters reported. While it is widely expected that the U.S. president will withdraw the country from the accord, Rouhani said Tuesday that Iran would continue

The moves in pre-market trade come as global markets remain on edge, awaiting an announcement by President Donald Trump on the future of an international nuclear agreement.

In the past, Trump has often threatened to withdraw the U.S. from the Iran deal — which lifted sanctions on the Middle Eastern nation, in return for the country to pull back on its nuclear ambitions — unless allies in Europe amend what he sees as shortcomings of the agreement.

In spite of the U.S. incumbent’s threats to pull out, President Hassan Rouhani stated that Iran had a plan to counter any move made by Trump when it comes to the deal; Reuters reported. While it is widely expected that the U.S. president will withdraw the country from the accord, Rouhani said Tuesday that Iran would continue to seek “constructive relations with the world,” despite potential sanctions.

In Asia, markets finished the session on a mostly positive note, while in Europe, stocks were under slight pressure during trade.

Aside from turbulence in the political space, earnings continue to flood in this week. On Tuesday, JD.com, Discovery, Camping World, Crocs, Dean Foods, SeaWorld, Disney, Electronic Arts, Marriott, Match Group, Etsy, GoDaddy, Papa John’s and Wendy’s are just a handful of names set to publish their latest financial results.

Colgate-Palmolive said on Friday first-quarter sales were below its expectations as demand in emerging markets including Latin America was muted, sending its shares down nearly 4 percent in premarket trading. Organic sales, which exclude benefits from acquisitions and divestitures, rose 1.5 percent as the company saw no growth in volumes in developing markets. Sales in Latin America, the company’s biggest market, rose just 0.5 percent to $929 million, hit by a slump in demand in Mexico. But dema

Colgate-Palmolive said on Friday first-quarter sales were below its expectations as demand in emerging markets including Latin America was muted, sending its shares down nearly 4 percent in premarket trading.

Growth in organic sales slowed in the first quarter from the previous quarter, even as the company spent more on advertising and invested in price to spur demand for its products that range from Brite dishwashers and Palmolive shower gel.

The world’s largest toothpaste maker spent nearly 13 percent more on advertising this quarter over the prior quarter, while it cut prices between 0.5 percent and 2.5 percent in Europe and North America.

Organic sales, which exclude benefits from acquisitions and divestitures, rose 1.5 percent as the company saw no growth in volumes in developing markets.

“The first quarter was a challenging one as category growth remained soft in many markets around the world,” Chief Executive Officer Ian Cook said in a statement.

Sales in Latin America, the company’s biggest market, rose just 0.5 percent to $929 million, hit by a slump in demand in Mexico.

But demand rose in North America and Europe, on the back of price cuts, helping Colgate’s net sales rise 6.4 percent to $4 billion, just in-line with the average analyst estimate of $4.02 billion, according to Thomson Reuters I/B/E/S.

“Today’s results show that Colgate, despite its competency as global consumer products leader, remains vulnerable to macroeconomic uncertainty in addition to what we think is an increasingly sophisticated set of local competitors,” Wells Fargo analyst Bonnie Herzog said.

Procter & Gamble earlier this month also posted organic sales growth that disappointed Wall Street, mainly because of pricing pressures in an environment where retailers are cutting back on costs.

Still, Colgate’s stock has outperformed peers. While the S&P 500 Household Products index has fallen more than 18 percent in this year, Colgate shares are down 12 percent. In comparison, P&G’s shares are down 21 percent.

Net income rose to $634 million, or 72 cents per share, in the first quarter ended March 31, from $570 million, or 64 cents per share, a year earlier.

Excluding certain items, the company earned 74 cents per share. Analysts on average had expected 72 cents.

Shares of the New York-based company fell 3.6 percent to $64.20 before the bell on Thursday, set to hit a fifteen-month low.

CNBC’s Jim Cramer knew he was “going against the grain” when he came out in favor of Keurig Green Mountain buying Dr Pepper Snapple. “With those numbers, Keurig Dr Pepper, the new company, will immediately become the cheapest growth name in the consumer packaged goods space,” he said. Still, Cramer understood Wall Street’s main question about the deal: why is the deal, in which the JAB Holdings-owned Keurig would buy Dr Pepper Snapple, selling at such a low price? The “Mad Money” host predicted

CNBC’s Jim Cramer knew he was “going against the grain” when he came out in favor of Keurig Green Mountain buying Dr Pepper Snapple.

But the “Mad Money” host couldn’t brush aside the potential for $1.27 in earnings power and a 60-cent dividend.

“With those numbers, Keurig Dr Pepper, the new company, will immediately become the cheapest growth name in the consumer packaged goods space,” he said.

Still, Cramer understood Wall Street’s main question about the deal: why is the deal, in which the JAB Holdings-owned Keurig would buy Dr Pepper Snapple, selling at such a low price?

The first reason was the analyst community’s unfavorable response to the merger. Even Keurig CEO Bob Gamgort admitted on CNBC’s “Squawk on the Street” that the deal — a combination of a make-your-own-coffee seller and a cold drink maker — didn’t seem “intuitive at first.”

The other reasons Cramer could discern were that the new company still wouldn’t stack up to old-line competitors like Coca-Cola and PepsiCo, and that Dr Pepper’s carbonated-drink-heavy portfolio didn’t offer strong enough prospects.

But for Cramer, the success of the new company hinged on only one thing: Bob Gamgort.

“Gamgort, the CEO of Keurig who’ll be taking over the combined enterprise, is a miracle man in what many people believe is a dying industry, the consumer packaged goods business,” Cramer said.

A veteran of the industry, Gamgort spent 10 years turning the privately-held Mars Inc. from a disjointed family business to a competitive consumer goods provider.

After that, Gamgort went on to Pinnacle Foods, doubling in value what many saw as a “too-boring” company with stale brands, Cramer said.

Then, Gamgort moved to Keurig after the troubled company was bought by the German JAB Holdings.

“I couldn’t believe it when he made that move because Keurig … was in shambles,” Cramer said. “It had the most unfocused growth strategy — I can’t even articulate it.”

Now, less than two years after Gamgort was appointed CEO, Keurig seems to have attained growth and profitability in addition to an acquisitive appetite, Cramer noted.

The “Mad Money” host predicted that the Dr Pepper deal will be the first of Gamgort’s many deals, and one that couldn’t possibly work without his magic touch.

“If Gamgort weren’t involved, candidly, I wouldn’t be interested at all,” Cramer said. “But he is, so I want everything to do with it. Yep, he’s that good, and he’ll use this new company to create the same kind of vehicle and value he did at Pinnacle. Let others run away. I want to run toward Keurig Dr. Pepper, just like last time.”

In the U.S., President Donald Trump unexpectedly said on Wednesday he was disbanding two advisory councils comprising prominent business executives. Minutes from the Federal Open Market Committee’s July meeting released on Wednesday also supported the move lower in the greenback. Shares of Tencent could also be set for moves during the trading day after the company’s second-quarter profit grew 70 percent to 18.23 billion yuan ($2.72 billion). The dollar fetched 109.96 yen at 8:20 a.m. HK/SIN com

In the U.S., President Donald Trump unexpectedly said on Wednesday he was disbanding two advisory councils comprising prominent business executives.

The move came after several members of Trump’s Strategic and Policy Forum and Manufacturing Jobs Initiative councils stepped down following the president’s Tuesday press conference in which the president blamed “both sides” for violence at a white nationalist rally in Virginia.

The dollar inched up after falling overnight against a basket of rival currencies following the latest political developments, with the dollar index standing at 93.462 at 8:06 a.m. HK/SIN after climbing as high as 94.145 in the overnight session.

Minutes from the Federal Open Market Committee’s July meeting released on Wednesday also supported the move lower in the greenback. While some Fed members said they were worried over the tightening labor market, others voiced their concern over low inflation rates in the U.S. The minutes also showed the central bank was prepared to trim its massive balance sheet, although the announcement of a start date was left for an “upcoming meeting.”

“One expects the timetable will be highly conditional, with a multitude of escape clauses, as the Fed monitors the market response clearly,” ANZ Research said in a Thursday note.

In corporate news, airline Cathay Pacific announced a first-half loss of HK$2.05 billion ($262.07 million). The company attributed its poor performance in the first half of the year to increased competition and higher fuel prices. Cathay Pacific also added in its release that it didn’t expect the operating environment to “improve materially” in the second half of the year.

Meanwhile, telecommunications operator China Unicom will raise almost $12 billion from investors such as Alibaba and Baidu as part of a push for mixed ownership reform. Shares of the company’s Hong Kong-listed unit were halted from trade Wednesday and will resume Thursday.

Shares of Tencent could also be set for moves during the trading day after the company’s second-quarter profit grew 70 percent to 18.23 billion yuan ($2.72 billion). Tencent is the company behind popular mobile game “Honour of Kings.”

In currencies, the greenback was softer against the Japanese currency, slipping below the 110 handle on the back of Japanese exports increasing for the eighth month in a row, according to Reuters. Exports rose 13.4 percent in July compared to a year ago, in line with the 13.6 percent increase forecast and above the 9.7 percent rise seen in June, Reuters reported. The dollar fetched 109.96 yen at 8:20 a.m. HK/SIN compared to an overnight high of 110.23.

On the energy front, oil prices took a breather after falling more than 1 percent overnight on concerns that U.S. production was increasing. Brent crude futures rose 0.24 percent to trade at $50.39 a barrel and U.S. crude futures tacked on 0.11 percent to trade at $46.83.

Here’s the economic calendar for Thursday (all times in HK/SIN):

8:30 a.m.: Singapore July trade data

9:30 a.m.: Australia July employment

10:00 a.m.: Philippines second-quarter GDP

4:30 p.m.: Hong Kong July unemployment rate

Equities on Wall Street closed slightly higher on Wednesday, with the Dow Jones industrial average rising 0.12 percent, or 25.88 points, to close at 22,024.87.